Technical Article

So Where Do We Go From Here?

I've been travelling the last few weeks shooting some videos for VMware PEX and RSA. When that happens, my browser tabs get crowded with the various stories I'm interested in but will read later. This time they all seemed to hover around Identity Theft. When I got home, in my awaiting physical mail was a letter from Target. I also returned something to a national hardware store and the cashier tried to crumple my credit-card-info-having receipt into a trash can. Kismet.

Let's take a look...

The FTC recently announced that Identity Theft is the #1 complaint in 2013, for the 14th consecutive year. Is that a record? While down slightly from 2012, it still accounted for 14% of the 2 million overall complaints. This is down from 18% in 2012. Florida, followed by Georgia and California were the worst hit states for ID theft. The IRS has also named Identity Theft as their #1 Dirty Dozen Tax scam for 2014.

Speaking of California, 7.5 million of the over 110 million breached Target accounts were Californians. California is one of the few states that require disclosure when more than 500 accounts are compromised. The first year California required reports, 2012, there were 131 breaches reported...in 2013 that rose to 170. The other interesting thing about California breaches is that many target smaller companies. In 2012, half of the reported breaches came from companies with fewer than 2500 employees and almost a third were businesses with less than 250 employees. Being small and relatively unknown is no shield.

Also in Southern California, the Feds busted a couple guys running a Tijuana-based identity theft ring. These dudes broke into a U.S. based mortgage broker's servers and siphoned off mortgage applications which included most of the borrower's personal info: name, birthday, SSN, DL number, tax info, the works. They then used that info to open credit lines and, with the info they had, were able to change access to the people's brokerage accounts. From there, transferring money to other accounts was a snap. From Dec 2012 thru June 2013 they stole personal data on 4200 individuals.

Javelin Strategy and Research released their annual 2014 Identity Fraud Study stating that in 2013, a new instance of identity fraud occurred every 2 seconds. 1 Mississippi, 2 Mississippi. Another. There was 13.1 million identity fraud victims on 2013. While the people number is going up, the actual money stolen, according to Javelin, in going down. They estimated that the total cost of identity fraud in 2013 to be around $18 billion, more than $3 billion less than 2012. 2004 holds the record at $48 billion. Attackers are now focusing on opening new accounts rather than piggy backing existing credit cards. Account take-over's, particularly for utilities and mobile phones are the new free-bees. Most of the stolen info appears to be from corporate breaches and about 1/3 of those who receive a breach letter actually becomes a theft victim. Your debit card also seems more valuable than your social security number. 46% of consumers with breached debit cards became victims verses only 16% of breached SSNs.

And in an interesting twist, the top complaint against debt collectors is mistaken identity. Trying to collect a debt from the wrong person was by far, the most common complaint to the Consumer Financial Protection Bureau (CFPB). I know this all too well since over the last 3+ years, we've been getting debt collection calls looking for a certain person. We tell them that we've had our phone number for years and stop calling. Few months go by, the debt gets sold to another collector and we get calls again. It got so bad that this person's own mother called to tell her son that the dad was in the hospital and probably wouldn't make it. About 2 weeks later we got a call from another family member looking to talk about the father's death. This guy was running from debt so much so, that his own mother couldn't get a hold of him when dad was on his death bed. Now that's bad.

So where do we go from here? Will we all need that personal chip installed on our left earlobe to verify identity? The payment terminal says, 'Please listen for verification.' Riff-raff will then be all like, 'Oh, listen to this cool song,' as they plug the bud into your ear only to suck the data off your PID chip. You didn't hear? That's our IPv6 Personal Identity Chip inserted into every newborn starting in 2025.